How do you make a video game that no one seems to want anymore? Game developer Double Fine faced that conundrum at the end of 2011. The company wanted to make an old-school PC adventure game, the type that had made company founder Tim Schafer a game design legend in the 1990s with titles like Day of the Tentacle and Grim Fandango. But the genre’s market had seemingly dried up in favor of more visceral experiences like first-person shooters. Video game publishers—the companies like Activision and Electronic Arts that provide the funding, marketing and distribution channels for most games you see on the shelf—had become increasingly uninterested in taking risks or appeasing niche audiences with their releases.

Schafer and his studio decided to cut out the middleman. They launched a $400,000 Kickstarter project in February, asking video game fans to collectively fund not only a new adventure game but also a documentary that would chronicle the development of the product from start to finish. In his project video on the crowdfunding website, Schafer did not promise fans the greatest game of all time. He didn’t even guarantee the game would be good. “Either the game will be great, or it will be a spectacular failure caught on camera for everyone to see,” he says in the video. It’s definitely not the kind of pitch a designer would be likely to make to a group of executives at a big-name publisher. But it resonated with fans in a big way.

The game, currently called Double Fine Adventure, reached its funding goal in eight hours and passed the $1 million mark in a day. By the time its 34-day funding period had elapsed, the project had amassed more than $3.3 million in funding from over 87,000 backers. Without writing a line of code, Double Fine already had a hit — and even better, they wouldn’t have to share the profits with a publisher when the game released.

While the project was a boon for Double Fine, it was also a big win for Kickstarter, which in 2012 transformed from a niche site that helped creative types get funding for their odd pet projects into a crowdfunding engine capable of consistently facilitating multi-million dollar ventures. More than 2.2 million backers pledged almost $320 million to Kickstarter projects in 2012, more than triple the $100 million that was pledged in 2011. Seventeen projects netted more than $1 million each.

Video games served as a significant driver of this growth, climbing from $1.3 million in pledges in 2011 to $56 million in 2012. The Games category, which includes video games, board games, and card games, was the most funded category on Kickstarter in 2012, beating the next closest sector by more than $25 million.

The success of Double Fine’s project in February kicked off a pledging spree for video games. “That really highlighted to the people who make games that this is really feasible and this is an important movement in terms of being able to find funding for smaller-sized studios, mid-sized games and, especially games that don’t necessarily have the mainstream audiences that I think publishers have really been pushing things toward,” says Cindy Au, Kickstarter’s director of community.

More big-name developers have since gotten involved in crowdfunded projects, such as Obsidian Entertainment, a studio that has worked on the famous Fallout series. Smaller teams, sometimes made of just one art designer and one programmer, are also finding success, buoyed by an expanded game market that now includes cheaper platforms like the iPhone and Xbox Live Arcade. For game designers, there’s a feeling of liberation when working outside the confines of the typical publisher-developer relationship.

“With a publisher, you have a very strict and rigid milestone schedule, where you have to be delivering builds of the game around every month that meet certain criteria,” says Greg Rice, the lead producer of Double Fine Adventure. “Since we don’t have a strict milestone schedule for this project, we’ve been able to kind of adapt to the situation. If we decide something is actually more important now than we thought it was six months ago, we’re able to change course a little bit and tackle it in whatever way we think makes the most sense at the time. That’s definitely been freeing, not to have to answer to anybody else.”

The crowdfunding approach also allows for more interactivity with fans. The backers of Double Fine Adventure get access to behind-the-scenes footage of the development process and are even asked for their input on level design. “They’re really cherishing the chance to be able to witness all these development milestones and see this project through from the beginning,” Rice says. “We’re going to have 80 or 90 thousand people who are very attached to the project when this comes out.”

Of course, there are drawbacks to the populist model of video game development. Projects in the Games category are successfully funded at a rate of about 34%, well below Kickstarter’s overall average of 43%. Delays, which Kickstarter projects have been notorious for in some instances, are also common. Visit the Kickstarter page for Code Hero, a game that raised $170,000 at the same time Double Fine Adventure was smashing records, and you’ll find a developer missing in action, angry backers, and rumblings about a class action lawsuit. A game titled “Mythic: The Story of Gods and Men” was found to be a scam shortly after it launched in April, but not before the project starter had gained $5,000 in pledges from video game fans. Last fall Kickstarter implemented more stringent standards for projects in the Hardware and Product Design category, but so far no new standards have been adopted for games.

Even when the project is legitimate and the developers meet their funding goals, there can be big challenges. Jordan Coombs, a former advertising agency art director who now designs games full-time, says he was surprised at the business challenges he and his brother faced after their Kickstarter project, a spaceship management game called Star Command, earned $37,000. The money was quickly eaten up by things like attorney fees and travel to gaming expos. A third of the cash was spent just to produce and ship the T-shirts, posters and other goodies that Kickstarter users typically offer as incentives to entice large pledges. And despite having shallower pockets than a big-name publisher, individual project backers can still be demanding.

“Everyone has an idea of how you should spend your money,” Coombs says. “When you do things they disagree with, it’s more personal than just a normal video game release. If Halo changes something with their multiplayer or something, people are just like, ‘Well that’s their game. That’s their prerogative to do that.’ With Kickstarter it’s, ‘I own a little bit of this. Why would you be able to do that?’”

It’s not yet clear how these crowdfunded games will fare in the marketplace compared to traditionally published games. Star Command (slated for an early 2013 release) and Double Fine Adventure (coming this fall) are both still in development. But Faster Than Light, a spaceship simulation game that earned $200,000 on Kickstarter from an initial goal of $10,000, was released in September to critical acclaim. The game was made not by a big-name developer but instead by two guys who left their jobs at 2K Games to pursue a passion.

Despite challenges, the big success stories of crowdfunding are likely to lure both big-name companies and would-be game designers looking for their first break. “I don’t know that everybody can have the same success we had,” says Double Fine’s Rice, “but I think anybody who has an interesting story or can really motivate fans and get them excited has a chance.”